Archive for January 24, 2010

Newsday’s Mark Harrington did a large public service for Long Islanders and for NYPA Board members, upstate elected officials and beleaguered NYPA customers by reporting that LIPA ratepayers paid over $100 million (yes, $100 million) to delay the opening of a new power plant in Suffolk County hyped by then LIPA Chairman and CEO Richie Kessel.

First, as Long Islanders know and upstaters have come to know, Richie Kessel never misses an opportunity to bloviate in the newspapers, on TV or radio or at the nearest diner. So, his remarkable “declined to comment” is noteworthy. Note that Kessel wasn’t unavailable as he is always available to Newsday and every other Island media outlet. Further note that Kessel didn’t deny that his screw-up in this one case cost Long Islanders $100 million. On this latest hundred million dollar snafu, he took a pass at the opportunity to be quoted.

Here are the facts as reported by Harrington: Kessel often fear mongered as LIPA head in order to support new projects and breathlessly orated in ominous tones that “the lights would go out unless this cable were built or this plant were not on line.” It turns out those claims were spurious.

In this latest case exposed to public scrutiny, Kessel shilled for a new efficient plant in Yaphank which ultimately opened in August 2009 but LIPA had by then accumulated so much excess available power under Kessel that the plant owners were paid $100 million by ratepayers to delay the opening of the new plant for a year. Obviously, Kessel’s fear mongering was wrong and may have been deceitful. Finally, Richie hid the $100 million obligation from ratepayers and it was turned up only by old-fashioned journalism by Newsday’s Harrington.

Viewed in its best light, Kessel’s LIPA had so screwed up the long-term planning for electric demand on Long Island that the ratepayers will be paying long into the future. Newsday quoted one energy expert as saying that “We never got to the point of the lights going out. And it resulted in poor financial decisions and expensive contracts.” To his credit, current LIPA CEO Kevin Law has instituted reforms to prevent this type of utility malpractice from recurring.

Here’s why this should matter to NYPA constituents. Combined with the Jones Beach wind power fiasco, LIPA procurement scandals, and now this $100 million debacle and the resulting sky exorbitant electric rates, Kessel has done great damage to the Long Island economy. Upstate businesses and elected officials should ask why upstate will fare any better with Kessel at the helm. Alarmingly, one common element of the Kessel approach to electric policy making and management is a fractious relationship with the truth. Upstate electricity buyers be warned.

THE KESSEL COUNTDOWN: 342 DAYS UNTIL RICHIE KESSEL IS FIRED BY THE NEW GOVERNOR OF NEW YORK.